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How to Define a Business Unit
How to Define a Matrix Structure
How to Define a Payback Period
How to Define a Purchase Discount
How to Define a W-2 Form
How to Define an Interest Expense
How to Define an Inventory Turn
How to Define Capital Expenditure
How to Define Cost Plus Profit
How to Define CPI
How to Define Gross Profit
How to Define Gross Profit Percentage
How to Define Inventory Turnover Ratio
How to Define Margins
How to Define Operating Income
How to Define Operating Margins
How to Define Opportunity Costs
How to Define Perpetuity
How to Define PERT
How to Define Retail Margins
How to Define Simple Interest
How to Define Static Budgets
How to Define Strategy Development
Summary: A payback period is defined by the amount of time over which a loan or investment is recovered or paid back. Learn more about how payback periods allow investors to know when they can expect to get their money back with insight from a certified public accountant in this free video on accounting terms.
Henry Gutter is a certified public accountant located in El Segundo, Calif. With more than 25 years of experience in finance and accounting, Gutter continues to practice with a diverse...read more
"Now we're going to define a payback period. A payback period is the time over which a loan is repaid or in the context of an investment the period of time expected for the cost of the investment to be recovered. As an example, if we were to borrow 100,000 dollars from a bank for some business purpose and the period of the loan is 5 years, the payback period of that loan is 5 years. If we were to make an investment in a piece of equipment, the payback period for that equipment would be it's productive life say 5 years to recover the cost of that investment. End of story."
eHow Article: How to Define a Payback Period
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